For Dq Treat, what constitutes 'Reasonable Business Judgment' when the Company exercises its rights?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
Company may operate, administrate, develop, and change the System in any manner that is not specifically precluded by the provisions of this agreement.
- (C) Reasonable Business Judgment. Whenever Company reserves or is deemed to have reserved discretion in a particular area or where Company agrees or is deemed to be required to exercise its rights reasonably or in good faith, Company will satisfy its obligations whenever it exercises Reasonable Business Judgment (as defined below) in making its decision or exercising its rights.
A decision or action by Company will be deemed to be the result of "Reasonable Business Judgment," even if other reasonable or even arguably preferable alternatives are available, if Company's decision or action is intended, in whole or significant part, to promote or benefit the Franchise System (or one or more components of it) generally even if the decision or action also promotes a financial or other individual interest of Company.
Examples of items that will promote or benefit the Franchise System include enhancing the value of the Trademarks, improving customer
service and satisfaction, improving product quality, improving uniformity, enhancing or encouraging modernization, and improving the competitive position of the Franchise System (or one or more components of it). Neither Licensee nor any third party (including, without limitation, a trier of fact) will substitute its judgment for Company's Reasonable Business Judgment.
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
According to the 2025 Dq Treat Franchise Disclosure Document, the company exercises 'Reasonable Business Judgment' when making decisions or exercising its rights. Dq Treat will be deemed to have satisfied its obligations in areas where it has discretion, or where it is required to act reasonably or in good faith, if it exercises Reasonable Business Judgment.
Even if other reasonable alternatives exist, Dq Treat's decision or action will still be considered Reasonable Business Judgment if it is intended to promote or benefit the franchise system, or any part of it, generally. This holds true even if the decision also benefits Dq Treat financially or in other ways.
Examples of actions that promote or benefit the Dq Treat franchise system include enhancing the value of trademarks, improving customer service and satisfaction, improving product quality and uniformity, encouraging modernization, and improving the competitive position of the franchise system. The agreement explicitly states that neither the franchisee nor any third party can substitute their judgment for Dq Treat's Reasonable Business Judgment.